Why Tesla Motors Deserves Their Loanby Tim Manni
Tesla Motors says all systems are go on unveiling their all-electric, “Model S” sedan by mid-2011. All except a $450 million (not billion) loan by the federal government. Referred to as “Silicon Valley’s solution to the nation’s energy problem,” Tesla says the Big Three’s inability to develop an all-electric vehicle spurred their motivation to try and become the first.
Taking into account Washington’s financial commitment to GM, Ford, and Chrysler, it seems only logical that the government would lend another American car company the money, especially since Tesla’s latest vehicle corresponds directly with the new administration’s agenda to increase the development of “greener” vehicles. Also, when’s the last time a company or institution approached the U.S. government for a loan under $500 million?
The Model S, which Tesla says would be the first mass-manufactured all-electric car, will cost $57,400, or $49,900 after tax credits. [Elon Musk, the company’s chief executive] said that, when gas savings are taken into account, buying a Model S will be comparable to buying a $35,000 Ford sedan. “Would you rather have this car or a Ford Taurus?” he asked, pointing to the sporty silver prototype.
Further proof that Tesla Motors deserves this loan is how the Model S stacks up against the competition — General Motor’s electric vehicle called the “Volt.” While Tesla claims the Model S can get 300 miles on a single battery charge, the Volt’s target range is only 40 miles on electrical power:
”Forty miles might be a sweet spot for making sure a lot of people get to work without using gasoline, but you’re doing it at a cost that will never be repaid in fuel savings,” Jeremy Michalek, an engineering professor who led the study, said.
An extremely small automaker with significant consumer demand, Tesla Motors has only one other model — a $109,000 Roadster sports car with 1,000 people on a waiting list.
Readers: In your opinion, does Tesla Motors deserve the $450 million loan?